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Consumer Class Actions: 15.5.8 Restrictions on Communication Regarding Objections and Opt-Outs

Attorneys seeking clients may wish to contact class members to inform them of perceived weaknesses in a proposed settlement and encourage them to object or opt out. Such communication is not forbidden but is subject to restriction by applicable rules of ethics and by the court. Recognizing that unfettered communication with class members may involve abusive practices such as characterizing the case in a misleading way or soliciting business in an unethical manner, the Supreme Court in Gulf Oil Co. v.

Consumer Class Actions: 15.5.10.1 Filing the Objection

In addition to checking local rules or standing orders for filing objections, an objector should be sure to carefully follow the provisions for objecting that are contained in the order granting preliminary approval, and should also review the class notice and settlement agreement—even if these provisions go beyond local procedures (and they usually do)—in order not to lose an objection on a technical flaw, such as filing the objection too late. In some settlements, the class notice may require an objector to file a claim (in a claims-made settlement) in order to have the right to object.

Consumer Class Actions: 15.5.10.2 Objectors and Intervention

The Supreme Court has held that, at least in a mandatory class action with no right to opt out, class members who have objected in a timely manner to the approval of a class action settlement at a fairness hearing—and who are not named plaintiffs—have the right to bring an appeal without first intervening.181 Lower federal courts have extended this holding and concluded that a motion to intervene is not necessary to preserve the class member’s appeal rights even in an opt-out class action.182

Consumer Class Actions: 15.5.10.3 Objector’s Right to Discovery

If discovery is necessary, the objector should request such discovery by motion, setting forth with specificity why it is needed; fishing expeditions are not looked upon favorably.198 While not an absolute right, objectors are often given the opportunity to conduct independent discovery.199 For example, upon objection to a fee motion, the decision of whether to grant such discovery is left to the discretion of the court.200 The critical quest

Consumer Class Actions: 15.5.12 Withdrawal of Objections

In addition to evaluating objections, the court will also scrutinize the withdrawal of objections, but only if a payment or other consideration is “provided in connection with: (i) forgoing or withdrawing an objection, or (ii) forgoing, dismissing, or abandoning an appeal from a judgment approving the proposal.”231 Previously, Rule 23(e)(5) provided that no objection to a settlement could be withdrawn in a federal proceeding without court approval.232 The 2018 Advisory Committee Notes to Rul

Consumer Class Actions: 15.5.13 Attorney Fees for Objectors

Federal Rule of Civil Procedure 23(h), which addresses the award of attorney fees and non-taxable costs in class actions, is not limited to class counsel.240 The general rule is that an objector is entitled to attorney fees from the common fund, provided the objector demonstrates that the objection actually benefited the class.241 While some courts have stated that the benefit must consist of a larger ultimate class recovery than would have been achieved in the absence of the objector’s effo

Consumer Class Actions: 15.5.14.1 When Can an Objector Appeal?

An objector can only appeal after a judgment granting final approval of the settlement is entered. A district court’s order preliminarily approving a settlement and conditionally certifying the settlement class is not an “order granting or denying class-action certification” triggering the possibility of a Rule 23(f) interlocutory appeal by an objector.249

Consumer Class Actions: 15.5.14.2 Standing to Appeal

An objector must have suffered some sort of injury to their own interests to have standing to appeal.251 Thus, an objector whose motion for attorney fees is denied has standing to appeal the denial,252 provided the objector was a member of the class or at least sought to intervene.253 On the other hand, a class member who was not a member of a subgroup required to submit proofs of claim in order to receive payment does not have standing to ob

Consumer Class Actions: 15.5.14.3 Appeal Bonds for Objectors

Class counsel may request that a trial court require any objector filing a notice of appeal challenging the approval of a proposed class action settlement to post a bond. Ordinarily, the type of bond that should be sought is a “bond for costs on appeal” under Federal Rule of Appellate Procedure 7,258 as opposed to a supersedeas bond under Federal Rule of Appellate Procedure 8.

Consumer Class Actions: 15.5.14.4 Standard of Review on Appeal

On appeal, the reviewing court will generally reverse the final approval of a settlement only for abuse of discretion.275 The court may, however, reverse and remand if the district court has not provided a “reasoned response” to objections—along with findings of fact and conclusions of law supporting its response—so that the appellate court may properly judge its exercise of its discretion.276 Although it is a limited review, it is not pro forma.

Consumer Class Actions: 15.7 Appeals by Third-Party Non-Objectors

Appeals are sometimes filed by third parties who have not objected to the settlement or the award of attorney fees. For example, an entity whose claim against the settlement fund has been denied on the ground that they are not a member of the settlement class has been found to have standing to appeal the district court’s denial of its motion to direct the settlement administrator to approve its claim.285 Indeed, in Rothstein v.

Consumer Class Actions: 17.1 Introduction

A class case should be prepared for trial like any other complex case—counsel should carefully consider at the outset of the case what legal standards apply, how liability and damages will be proven, and how a court will manage a trial of the size and type counsel has filed. Because these issues have important implications for meeting the class certification requirements of commonality, predominance, superiority and manageability, consideration given early in the litigation to how the case will be tried will help maximize the prospects for certification.

Consumer Class Actions: 17.2.3 Litigation Plan

One way in which class action pre-trial and trial proceedings are managed is by adopting a litigation or case management plan. Some courts require presentation of a formal proposed plan as part of the certification process, and many more encourage or require discussion of trial issues in seeking certification.3 Regardless of whether or not it is required to be presented to the court as a formal plan, class counsel should take the initiative in developing a litigation or case management plan, even if only for internal use.

Consumer Class Actions: 17.2.4 Trial by Jury

Shortly after the adoption of Federal Rule of Civil Procedure 23 in the 1960s, the Supreme Court confirmed that “it now seems settled in the lower federal courts that class action plaintiffs may obtain a jury trial on any legal issues they present.”6 When common legal and equitable issues arise in the same case, the legal questions must be presented for jury determination before the trial judge decides the equitable ones.7

Consumer Class Actions: 17.2.5 Liability and Damages in One Trial

A long-held plaintiffs’ trial stratagem is that a jury or judge should decide damages in conjunction with liability. This is the most straightforward approach and should be followed if at all possible. Whether and under what circumstances one trial may resolve all issues is case specific and case dependent. Normally, the management problems that arise in proving common liability issues are not insurmountable.

Consumer Class Actions: 17.2.7 Innovative Trial Structures

In certain cases, courts have adopted innovative trial structures to try the cases because of challenges in presenting evidence of liability or damages. These approaches are varied and are specific to the challenges of a particular case. For example, in Hilao v. Marcos,16 the Ninth Circuit affirmed a trifurcated trial approach that decided liability, punitive damages, and compensatory damages in three successive trial phases.

Consumer Class Actions: 17.3.3 Proof Through Class Members

Calling class members as witnesses for liability purposes involves balancing strategic considerations initially involving discovery and ultimately involving the presentation of the case at trial.

The decision to call absent class members as witnesses should be made strategically, and class counsel should be careful to balance the advantages and disadvantages. There can be instances in which the case for liability is strengthened considerably by calling absent class members. However, the identification of such witnesses may have negative implications as well: